Market Report
San Francisco Retail Market Report
3Q 2026
Small-Format Growth Offsets
Persistent Large-Scale Weakness
Recovery evident in the City of San Francisco. Retail vacancy has gradually compressed, and both office occupancy and downtown foot traffic have notably improved since early 2025. The strongest performance has come from properties smaller than 50,000 square feet, which recorded a combined 200,000 square feet of net absorption over the 12 months ended in June. Fitness centers, grocery stores, and experiential tenants led leasing activity. Meanwhile, an overhang of larger spaces from several department store closures keeps overall vacancy elevated, especially around Union Square.
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